The year 2025 was marked by heightened tensions between Canada and its largest trading partner, the United States. This friction primarily stemmed from tariffs imposed on key Canadian industries.
As a result, Canada’s share of U.S. imports dropped from 12.6 per cent in 2024 to 11.2 per cent in 2025 — the second-largest decline among major trading partners, according to the Royal Bank of Canada.
While the Canada-United States-Mexico Agreement (CUSMA) shielded approximately 90 per cent of Canadian exports from tariffs through its rules of origin, industries outside this protection bore the brunt of U.S. trade policies. Steel exports, for instance, plummeted by 30 per cent in 2025. Other sectors, including softwood lumber, aluminum and motor vehicles faced targeted pressures that rippled through construction supply chains.
Looking ahead, CUSMA is set for review later this year, with Canada and the United States appearing far apart on key issues. If an agreement isn’t reached by the July 1 deadline, the deal will face annual reviews and could ultimately lapse in 2036 without a new accord.
These challenges cast uncertainty over the future of the trade relationship between the two nations. In response, the Mark Carney government has taken steps to reduce Canada’s reliance on the potentially unpredictable U.S. market by expanding the country’s resource and trade capabilities.
Channeling capital into resource and trade infrastructure through major projects
The push to strengthen Canada’s resource and trade capabilities has been spearheaded by the 2025 budget and the establishment of the Major Projects Office (MPO), both of which aim to channel public and private funding into transformative capital projects.
The 2025 budget outlines a bold vision, allocating $110 billion for major infrastructure, another $110 billion to enhance productivity and competitiveness, $30 billion for defense and security and $25 billion for housing. Collectively, these investments are designed to catalyze $1 trillion in total economic activity.
Complementing these efforts, the MPO plays a pivotal role in advancing Canada’s material and trade ambitions by expediting the approval and execution of nation-building projects. To date, the MPO has taken over $110 billion worth of projects under consideration, including LNG export terminals, critical mineral extraction and processing facilities, port expansions and the development of northern trade corridors.
Nation‑building projects lift today’s starts and supports future
The challenge facing Canada is clear. Its largest trading partner has adopted adversarial trade policies, and the mechanism that has shielded much of Canada’s economy — CUSMA — faces an uncertain future. In response, the current government has taken decisive action, prioritizing investments in resource extraction and export infrastructure to reduce the country’s reliance on the United States.
For construction professionals, this focus on nation-building projects has provided a vital boost to the industry amid broader economic uncertainty.
In 2025, Canada recorded its highest-ever total for nonresidential construction starts, encompassing civil and nonresidential building projects. While 2026 is projected to see a 6.6 per cent decline from these record levels, it is still expected to rank as the second-highest year for nonresidential construction starts in the country’s history.
This underscores how the government’s emphasis on expanding Canada’s extraction, production and export economy is creating tangible opportunities for construction firms. Beyond the large-scale projects themselves, several downstream construction subcategories remain robust, further supporting the industry.
Devin Bell is the associate economist with ConstructConnect.
